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Leases

3 Months Ended

Mar. 31, 2023

NOTE 7 – Leases

The Company had operating right-of-use assets, included in property and equipment, of $23.2 million and $23.6 million as of March 31, 2023 and December 31, 2022, respectively. The Company had lease liabilities, included in other liabilities, of $25.5 million and $25.8 million as of March 31, 2023 and December 31, 2022, respectively. We maintain operating leases on land and buildings for various office spaces. The lease agreements have maturity dates ranging from April 2025 to February 2032, some of which include options for multiple five-year extensions. The weighted average remaining life of the lease term for these leases was 6.74 years as of March 31, 2023. The ROU asset and lease liability are recognized at lease commencement by calculating the present value of lease payments over the lease term.

The discount rate used in determining the lease liability for each individual lease was the FHLB fixed advance rate which corresponded with the remaining lease term at implementation of the accounting standard and as of the lease commencement date for leases subsequently entered into. The weighted average discount rate for leases was 2.32% as of March 31, 2023.

The total operating lease costs were $595,000 and $778,000 for the three months ended March 31, 2023 and 2022, respectively.

Maturities of lease liabilities as of March 31, 2023 were as follows:


	Operating
(dollars in thousands)	Leases
2023	$	1,513
2024		2,067
2025		2,124
2026		2,176
2027		2,232
Thereafter		22,200
Total undiscounted lease payments		32,312
Discount effect of cash flows		6,813
Total lease liability	$	25,499